Soft to the touch, but a rough product to trade these days, on Monday cotton exploded to the exchange limit, touching a new record as more evidence mounts that global cotton supplies may fall short of China's intensifying demand.

According to the latest data provided by the U.S. Department of Agriculture, U.S. export sales of upland cotton soared 56% to 403,341 bales in the week ended February 24 from a week earlier as shipments increased to China, Turkey and Bangladesh.

The political turmoil in Egypt, the world's 15th largest exporter of cotton, certainly isn't helping to reduce prices either.

China, however, is already the world's top buyer of soy and cotton and the United States is the primary supplier of those two particular commodities. Consequently, just as China's appetite for US grains is driving food prices higher, the world's most populous nation's unquenchable thirst for cotton will similarly make clothes more expensive, experts agree.

“Demand fundamentals are working themselves out,” David Zeanah, a commodity broker at Keith Brown & Co. tells Bloomberg on Monday. “We don’t have any cotton; everything you can get your hands on is worth gold right now.”

On Friday, food and agribusiness financial service provider Rabobank said in a report that “export commitments out of the U.S. continue at record pace, and due to the razor-thin expected ending stocks, demand must be rationed as there is not enough cotton.”

Late last week, the Australian Cotton Shippers Association said that "buyers have already purchased more than 80% of the nation’s coming cotton harvest in advanced sales." Phill Ryan, director of the industry group, added: “The amount of so-called forward sales compared with usual levels are 50% to 60% higher this season.”

“The U.S. is the biggest exporter in the world and they are sold out." Ryan concluded. "It’s a worldwide scramble for limited supplies.”